Author: Dan Rafter / Source: Wise Bread
You know that owning a home and making a mortgage payment each month is a big financial commitment. You know, too, that having a solid credit score is a must if you want to be approved for that mortgage loan.
But what if you never plan on owning a home? What if you plan on renting forever?
You don’t need to worry about maintaining strong credit and building a high credit score, right? Wrong. Even if you never plan on making the jump from renting to owning, there are still several money moves you need to make to ensure a happy financial future.1. Pay your bills on time each month
Paying a credit card bill 30 days or more past due will send your credit score tumbling by 100 points or more. You might not think that matters if you never plan on taking out a mortgage and buying a home. But it does.
Other lenders rely on your credit score to determine how likely it is that you’ll make your monthly payments. They also use that score to determine how high of an interest rate to charge you if they do approve you for a loan.
This means that lenders will look at your credit score when you apply for a loan to buy a car. They’ll look at it if you need to take out a personal loan. And when you’re applying for credit cards, you’ll need strong credit to qualify for cards with the best rewards programs and interest rates. (See also: Pay These 6 Bills First When Money Is Tight)
2. Keep your credit card debt low
Consumers applying for mortgages know that having too much credit card debt can hurt their application. But even if you’re not planning to own a home, it makes good financial sense not to carry a balance on your cards each month.
Credit card debt comes with high interest rates. If you don’t pay off your balance at the end of each billing period, credit card debt can grow quickly. If you’re not careful, those minimum monthly payments can become a huge financial burden.
High amounts…
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